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TMI Blog2022 (6) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... ecord also revealed that the Respondent No.1/CBI/FC has filed the Petition for initiation of CIRP originally on 22.10.2018 but before the admission of the said application, the Corporate Debtor has approached the Respondent No.1/Bank for settlement of their dues and accordingly, the compromise proposal submitted by the Corporate Debtor/Appellant was accepted by the Applicant Bank vide sanction letter dated 28.01.2019 - OTS is a mechanism available with the banks for years together to allow survival of Debtors and maintain cash flow for banks. However, repeated failure reflects either the intention of the Corporate Debtor/Appellant is not fair as in every OTS the settlement amount is going down and thereby reflecting that delay in CIRP will make the organization weaker and the object of the code for maximization of the value of assets of such persons shall not happen. The are no infirmity in the impugned order and the order deserves to be sustained - Appeal fails and is dismissed. - Company Appeal (AT) (Ins) No. 624 of 2021 - - - Dated:- 10-6-2022 - [Justice M. Venugopal] Member (Judicial) And [Dr. Ashok Kumar Mishra] Member (Technical) For the Appellant : Mr. P. Nagesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orld at large from 24.03.2020, the entire country has been under a complete lockdown and curfew was imposed. Even the banks started working on minimal staff only to provide essential services to the public at large. All this laid investors who were willing to invest in the Appellants Company were not able to pump in the money as they were completely stuck up. The Appellant found mobilizing resources extremely difficult. The Petitioner s representative were also not able to meet the Bank due to lockdown. (g) The Petitioner addressed various letters to the R-1 requesting for extension of time to make balance payment of OTS amount. Initially R-1/Bank extended the period for making the balance payment subject to interest. (h) The Appellant was in constant co-ordination with the R-1/Bank and again submitted a OTS on 28.06.2021 before the commencement of hearing and agree to make payment of balance amount of Rs. 36 Crores to the R-1/Bank. (i) The Appellant states that it may not be out of place of mention that the R-2 Company has principally two major ongoing projects viz, (1) Project Ramrajya and (2) Project Swarajya and around 2500 flats have been sold to various homebuy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entire dues of the Bank.[pg. 573] 3. 13.03.2020 The Respondent Bank agreed to the OTS and to settle entire dues for a sum of Rs. 40 crores. The OTS further contemplated an upfront payment of Rs. 4 Crores which was admittedly paid by the Appellant.[pg. 578] 4. 15.03.2020 The entire world came to a standstill with the onslaught of the pandemic Covid 19. Complete lockdown and several other restrictions were imposed by the Governments. 5. 30.03.2020 16.05.2020 28.06.2020 In the circumstances caused due to the pandemic, the Appellant sought further time for complying with the OTS. The Respondent Bank granted such extension upto 30.06.2020.[pg 580] The Appellant again sought extension for further period as the entire real estate industry had come to a standstill.[pg. 584] 6. 08.07.2020 The Respondent Bank cancelled the above OTS.[Pg. 581] 7. 08.07.2021 16.07.2021 The Insolvency Application was taken up by the Ld. NCLT through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ications. The core of it must, however, remain, namely, that the person affected must have a reasonable opportunity of being heard and the hearing must be a genuine hearing and not an empty public relations exercise. That is why Tucher, L.J., emphasized in Russel v. Duke of Norfolk (1949) 1 All ER 109 that whatever standard of natural justice is adopted, one essential is that the person concerned should have a reasonable opportunity of presenting his case . 6. Section 10A of the IBC, 2016 was inserted by an amendment specially to cater to the situation created due to the spread of pandemic. Section 10A reads as under: 10A. Suspension of initiation of Corporate Insolvency Resolution Process- Notwithstanding anything contained in sections 7, 9 10, no application for initiation of corporate insolvency resolution process of a corporate debtor shall be filed, for any default arising on or after 25th March, 2020, for a period of six months or such further period, not exceeding one year from such date, as may be notified in this behalf: Provided that no application shall even be filed for initiation of corporate insolvency resolution process of a corporate debtor for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Form II. Thus, the present Company Petition satisfies all the necessary legal requirements for admission. 3. Under these circumstances, this tribunal is of the considered opinion that the above company petition is liable to be admitted and accordingly the same is admitted. 11. The Resolution Professional/R-2 has submitted the following: (a) He made public announcement on 26.07.2021 under Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 in the following newspaper i.e., Free Press Journal and Navakal for inviting claims from creditors of Neptune Developers Ltd. And the last date for submission of claim was 06.08.2021. (b) That the IRP has filed its report certifying Constitution of Committee of Creditors on 18.08.2021 and till that date the IRP received claims from 350 Class of Creditors (Homebuyers), 3 claims from Financial Creditor and 3 from unsecured Financial Creditor. A few connected details from the copy of the IRP s report certifying Constitution of Committee of Creditors is given hereunder: (c) That the IRP called its 1st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and therefore no further steps will be taken in the CIRP. The IRP further states that, based on the legal advice received and after considering the same, the IRP will continue to manage the affairs of the corporate debtor till further orders of the supreme court and the powers of the Board of Directors shall remain suspended and their powers be exercised by the IRP. (j) In the meantime, Asset Care Reconstruction Enterprise Ltd. Anr. ( ACRC ) has preferred an IA bearing No. 1979/2021 before NCLT, Mumbai for following reliefs: (i) That the CIRP initiated applies only to the project known as Neptune Swarajya, Ambivali, Kalyan, Thane and the creditors thereof. (ii) That the CIRP initiated does not extend and apply to the project known as Project Ramrajya being developed by the Corporate Debtor at Ambivali, Kalyan, Thane and all securities furnished in that regard and that the same shall stand excluded from the CIRP of the Corporate Debtor and also to furnished the same in the Information Memorandum to the CoC of the Corporate Debtor. (iii) Stay the preparation of the Information Memorandum of the Corporate Debtor and further steps in the CIRP of the Corporate Debtor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13.08.2019 Insolvency Application was filed by R1 Bank u/s 7 of the Code for default in payment of Rs. 185,53,24,319/- [pg. 55-64, Appeal Vol. 1] 7. 03.12.2019 Adjudicating Authority granted time to CD to file a reply [pg. 56, reply Vol.] 8. 24.01.2020 CD sent 2nd OTS offer to pay Rs. 40 crores on or before 31.03.2020[pg. 573, Appeal Vol.3] 9. 13.03.2020 R1 Bank sanctioned 2nd OTS and it was clearly stated therein the DRT/NCLT proceedings shall be withdrawn only on payment of entire settlement amount. Further, if the payment was not made as agreed, then the OTS would stand automatically cancelled and bank would be entitled for entire dues [pg 578-579, Appeal Vol. 3] 10. 30.03.2020 CD requested for extension of time to pay. 11. 16.05.2020 R1 Bank gave extension till 30.06.2020 only, to pay the balance sum along with simple interest @ 8% for delayed period [pg 580, App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the email dated 08.07.2021 that only after the hearing in Sl. No. 4 the counsel was removed [pg. 585, Appeal vol.3] iii. The Adjudicating Authority s order dated 08.07.2021 records that the parties were heard [pg. 58, reply Vol.] iv. the Appellant suppressed the cause list for 08.07.2021 and the order dated 08.07.2021 while filing the present appeal. v. No application or sworn affidavit has been filed by the counsel for the Appellant/CD alongwith the present Appeal stating that he was removed from the hearing and was not given any opportunity to present the case. vi. Assuming without admitting that the Appellant/CD s counsel was not heard by the Adjudicating Authority, then the Appellant may have immediately approached this Hon ble Appellate Tribunal challenging the order dated 08.07.2021, but no such appeal was filed. Furthermore, no steps were by the Appellant to file any application for recall of the order dated 08.07.2021 or for re-opening the arguments before the Adjudicating Authority; vii. Only after the Adjudicating Authority had passed a judgment dated 16.07.2021 admitting the Insolvency Application, the Appellant belatedly filed the present Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) It is also not in dispute that Corporate Debtor s account was declared as NPA on 31.03.2015. (c) It is also not in dispute that Corporate Debtor has not acknowledged the specified amount i.e. approximately Rs. 95 Crore due to the Respondent No. 1/CBI as on 30.06.2017. (d) The parties both the Financial Creditors/Respondent No. 1 and Corporate Debtor/Appellant is not denying that an OTS was not sanctioned on 28.01.2019 and the same was rescinded by the Bank on 17.06.2019. The Corporate Debtor failed to pay balance Rs. 83.18 Crore out of OTS sanctioned of Rs. 93.18 Crore and hence only Rs. 10 Crore was paid by the Corporate Debtor/ Appellant to the Bank. (e) What it is observed that the Respondent No.1/Bank sanctioned 2nd OTS on 13.03.2020 for an amount of Rs. 40 Crore and out of which only Rs. 4 crore was paid by the Corporate Debtor/Appellant to the Respondent No.1/Bank. (2) From the above it is very much clear that the debt is neither barred by the limitation nor it is barred by the provision of Section 10(A) of the IBC, 2016 as the bank has filed the petition on 13.08.2019. (3) The record also revealed that the Respondent No.1/CBI/FC has filed the Petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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